The Curse Of Ken Rogoff—–The War On Cash Is A Prelude To Government Default And Wealth Seizure
It seems clear that Rogoff’s negative interest rate/cashless society proposal is structured to engineer a back-door US government debt default.
Over the long term, by forcing savers, businesses, and banks to give the US government their money, and allowing Washington to repay less of that money each year, the US can legally default – on all that it owes.
More worrying for investors: the fact that Rogoff, Ben Bernanke and others are proposing negative rates despite the considerable evidence that they will do no economic good suggests that they believe that the US government cannot pay back its debts – that it is already insolvent.
Rogoff’s “cashless society” is an elegant solution to a key problem bedeviling the Federal Reserve: with interest rates at the zero bound, the US central bank has no ammunition left to fight the next recession – because if cuts rates below zero, savers will withdraw their cash and put it under their mattresses.
Another challenge that Rogoff overlooks in his econometrics models is that banning paper currencies will drive widespread acceptance of alternate forms of money ranging from crypto-currencies to precious metals, not just among underground economy even among the economic elites themselves.
Then again, maybe Rogoff is just as good a player on the public policy front as he is on the chess board. There is a possibility that he wrote The Curse of Cash as a quasi-job application for a higher government post, possibly as Treasury Secretary in a Clinton Administration.
“If you give me the job, I’ll help make sure that government can borrow all it wants and it won’t have to pay any of it back,” may be the sub-text to Rogoff’s book.
DYI Comments: Since the inception of the Federal Reserve in 1913 inflation has been the rule except during a brief pause the Great Depression of the 1930's. How were the costs of WWI, WWII, Korean War, Vietnam, and President Johnson's War on Poverty paid? High taxes and inflation and lots of it!
The oldest game by governments all through history. The Romans by chipping off a small amount from their gold and silver coins to make new coins to finance wars or building projects. Of course over time the old coins - as the populous caught on - were of lesser value - INFLATION! The new coins needed to be chipped all to keep the Ponzi scheme going which led to the major reason for the fall of the Roman Empire! The elites of Rome and later Constantinople destroyed the Roman "back bone" their version of a middle class into poverty. The Roman Empire destroyed itself and replaced by a feudal state known as the Dark Ages.
Without property rights - honest money is an expression of that right - the "back bone" or middle class will forever be under assault. This will eventually lead to the end of the U.S. as we know and replaced with an elite controlled socialist feudal state.
David Stockman: Central Bank Era of Bubble Finance Leading to a Dead End
Stockman explains his take on the Central Bank era saying, “I think we are on the very edge, but what is different this time and makes it scarier… is I believe the central banks that ruled the roost have gone from one extreme to the next and done unfathomable things like negative interest rates on $13 trillion of bonds around the world, monetization of the debt, and bond purchases that are staggering such as $90 billion a month in Europe. . . .
So, this time, as the phrase goes, they went all in.
They have violated every principle of sound money and sustainable finance that mankind has ever learned about over many centuries.
They have taken us to the edge, but they are out of dry powder. I think it’s pretty obvious that they can’t go any deeper with subzero interest rates, or negative interest rates…
If they tried this in the United States, I think there would be a huge political uprising…
They are out of dry powder and out of tools, and therefore, the financial markets of the world are more vulnerable, maybe even more so than in 1929.
"You are talking about a bond bubble like never before imagined or conceived, and the stock market is the same way as well as derivatives.”
DYI Comments: My model portfolio speaks for itself:
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